Senator the Hon Simon Birmingham

Steve Price: Simon Birmingham, Senator Simon Birmingham is the Federal Minister for Finance. He's been pivotal in putting this budget together, joins us. Thanks for your time.

Simon Birmingham: Good morning, Steve. Great to be with you.

Steve Price: Are you getting enough bang for your buck?

Simon Birmingham: Well, Australians certainly are, because this is a budget that is expected to generate another 250,000 jobs across Australia and you know this budget is centred on a plan of economic growth and on a plan of lower taxes to get us through COVID and then targeted lower taxes, on going, in areas of economic growth because it's through a stronger economy that we can keep the job growth going and that we can then afford to invest in some of the essential services that we've outlined in the budget last night. We've made those investments in a landscape where, yes, it's difficult because of COVID. Yes, COVID changed well and truly the debt outlooks for the country going forward. But because of our stronger economic performance than pretty much anywhere else in the world, we've been able to make the investments in those essential services last night while bringing net debt down over each of the next 10 years relative to what was forecast in last year's budget.

Steve Price: Tax cuts will help lower to middle income earners, but we still seem to be stuck in this cycle of low or zero wages growth. What in that big document where you threw billions and billions of dollars at a range of vital things, what in that budget is going to create wages growth? I mean, people listening to us, Senator, on the way to work this morning are looking back at maybe five years of no wage growth. I mean, everyone understands what COVID did last year, but how can we give Australians some confidence, looking forward to be optimistic about getting a wage increase?

Simon Birmingham: Well Steve we are also in an environment of very low inflation and very low, very, very low interest rates. And so it's not to be unexpected that you would see against that environment, relatively low growth across costs right around the economy, including in relation to wages. But how do we get some growth in wages again? Will we get it through driving the economy towards those theoretical levels of full employment, which are now assessed to be below five per cent? And pleasingly, this budget Treasury forecasts predict we'll see not only 250,000 additional jobs created, but will see unemployment head below five per cent for a sustained period of time for the first time in a long time. And that will start to create the type of tension in the wages market. How do we get there? We get there through the type of tax incentives that we've created, full expensing for Australian businesses extended for a period of time to bring forward investment in the Australian economy. That doesn't just create short term jobs, but it makes Australian businesses more productive and sustains them over the long term. In terms of job creation, targeted tax measures in areas such as the creation of a new patent box that will make it more attractive to not only develop and innovate medicines and biotechnologies and such products in Australia, but also to commercialise and manufacture them in Australia over the long term. Indeed, other measures such as our ongoing manufacturing strategy, our investment in our AG 2030 plan, the new $1.2 billion digital economy strategy. They're all about driving economic growth and jobs growth that if we can hit those unemployment targets and we’ll then create the impetus for wages growth, as well as provide the stronger revenue streams to fund essential services, like aged care and mental health.

Steve Price: Tens of billions in infrastructure, that's good. But how do you then managed to convince the states to get these projects up and running? And do you have enough workers to actually build these infrastructure projects that are so pivotal to giving people jobs? I mean we've got zero immigration, border we're told last night is going to be shut probably until the middle of next year, if not later. So we're not bringing skilled workers in, are we're going to run out of workers to build these projects? And do you have confidence in some of the states, particularly in places like Victoria, where the current Labor administration, of course, famously tore up a billion dollars not to build a road? It's fine for you to announce these things. How do you manage them properly and get the states to actually build them?

Simon Birmingham: Well Steve you're right. Sometimes we do face difficulties in getting the states to deliver on some of the projects and that there are different time variations that mean each budget we have to update the infrastructure profile and sometimes we get to bring things forward. Sometimes we have to push them out. Sometimes we just take responsibility ourselves where we can for certain projects. You know, for so many years, this country debated whether or not there should be a second Sydney airport. We’re the government who decided and are building. And you can head out there and you can actually see construction works on the ground happening right now, building that second Sydney airport in western Sydney. The same about an inland rail to really improve freight connectivity up and down the east coast of the country and take trucks off the road and move our freight more efficiently and effectively. Again, we've stepped up. We're constructing it, you can visit parts of the country and see it under construction right now. And in this budget, for example, we've identified a further $2 billion to construct the new intermodal freight terminal in Melbourne. And again, that's about creating infrastructure that lifts the nation's productivity. That makes it more effective to get goods across the country, to get goods to export markets. To do it in a timelier, faster, cheaper way for business that is essential to our ongoing prosperity.

Steve Price: Almost the same question. And I know you're a process driven person and you like to see outcomes from money spent, which is what all governments that we elect should do. There's a big boost in aged care funding, $ 17.7 billion. There's $6.5 billion over 2 years to provide new home care packages. There’s still a big waiting list. When you look at the numbers that you've put into aged care off the back of the Royal Commission. Royal Commission, I think wanted more. You were sensible in what you could put into aged care. How do you then guarantee, given that aged care split between federally funded, state funded and then privately run aged care, that your money is properly spent, that it's not just a big honey pot of money that people like you know, we have wealthy property developers who see aged care and federal government money and go, right o, you beauty? I'm going to be rot the system and get as much bang for my buck out of that as I can. How do you manage that?

Simon Birmingham: Absolutely. So it is essential that that aged care isn't just about more dollars, but is about reform as well. And so in responding to the recommendations of the Royal Commission, yes, there's more funding $17.7 billion over the next few years and that's important. But then there's a change to standards and changes to how the market will operate. The changes to standards include mandating minimum hours, in relation to minimum time in relation to the care that individual residents receive so that there must be a minimum 200 minutes personal care time per resident per day made available. That includes at least 40 minutes of a registered nurses time. We’re going to put that in the standards and then have a stronger regulator, better powered, better funded…

Steve Price: Who checks it, Senator? Who goes around to the nursing home and says have you had your 40 minutes of day today.

Simon Birmingham: So there will be more audits in relation to staffing ratios to meet those standards. More audits that are then transparently made available to the public as part of a new star rating system of providers. And changes to the way in which that aged care market operates in terms of the way beds are allocated. So that we can actually provide consumers with more power to see who the good operators are based on that transparent reporting of their standards, of the staffing profiles and those other factors that go into that. And enable consumers to be able to go to operators who will have a freer ability if they are a good provider with increasing demand to put more beds in their services rather than at present. Beds have been licenced and then basically, once the providers got the licence, they sit on it. And the incentive isn't always the best for them to provide the highest quality of care. So we're doing this through funding, we’re doing this through standards [INDISTINCT]

Steve Price: I’m just wondering whose out in suburban Adelaide, where you live, going into a nursing home, saying have you spent that extra $10 or not on a resident per day to make sure that nutrition is better. I mean, I think it's a wonderful thing to make nutrition and care better, nursing care better, more numbers. But I just worry about the holes in the market where shonky operators can get through this without getting caught.

Simon Birmingham: Steve, your concerns are legit, but it is why, again, extra powers to regulators, a new model of allocating the places, greater transparency to the public and greater audits taking place and, of course, investment in the workforce as well. We know that we can't mandate these sorts of minimum standards without there being a workforce to do that. And so there's 33,000 plus additional training places to generate that workforce for the aged care sector too.

Steve Price: Just finally, you're a former Trade Minister. You must be disappointed that we're now looking at least a border closure in Australia to international people coming in and Australians leaving to potentially the end of 2022. Can you see that being a shorter lock down? And are you just talking about the worst case scenario or do you believe that's going to be the case?

Simon Birmingham: So this is an assumption put into the budget so that we can frame the budget. It's not yet a government policy decision that says the middle of next year is when we begin to reopen borders. It could be earlier. It could be later. That really does depend on the health advice and outcomes at the time. Our commitment is that we want to reopen those borders and get things back to normal as soon as we possibly can, but no sooner than it is safe to do so. Because the continued suppression of COVID across Australia is what’s got us into a position where we have more people in jobs today than we had going into the pandemic. And we're the only developed economy in the world who has been able to achieve such a fast recovery like that. In fact, in Europe, they're now facing a double dip recession. So we have to continue to protect our economic strength, which does actually require COVID protections, including those border controls. But they won't be there a moment longer than is necessary. And certainly and we are going to work as hard as we can to be in a position to reopen it. But we do so against a very uncertain global landscape with different variations and mutations of COVID and having to continue to assess the potential risks that they pose.

Steve Price: You're always generous with your time. Have a great day. Thanks for it.

Simon Birmingham: Thanks Steve. My pleasure.